Draft Ministerial Declaration on Cross-border remittances

Posted 04 Mar 2024

Updated 27 Mar 2024

2 min read

It is a joint communication from 4 countries (India, Bangladesh, Nepal & Sri Lanka) to the Committee on Trade in Financial Services (CTFS).

Key Highlights of Declaration
- Significant socio-economic impact of remittances, especially for developing nations.
  - 78 % of remittance flows in 2023 went to Low and Middle-Income Countries.
- Reaffirms commitment to UN SDG Goal 10.C to,
  - reduce transaction costs of remittances to less than 3 %, and,
  - eliminate remittance corridors with costs higher than 5 % by 2030.
- Current global average transaction costs of remittances is at 6.18 % (more than twice the SDG target).
- Instruct the CTFS to undertake a work program consisting of efforts toward reducing the cost of remittances.

Remittances: Generally, refer to money or goods that migrants send back to families and friends in origin countries.
- India is the world's largest recipient of remittances estimated at 125 billion USD in 2023.

Significances of Remittances for India
- Important source of family income, increasing people's purchasing power which drives the consumption market.
- One of the largest sources of external financing and a major contributor to forex reserves.
- It tends to be more stable than capital flows.

It is a subsidiary body under the Council for Trade in Services (CTS) under the World Trade Organization (WTO).
- CTS is responsible for facilitating the operation of the General Agreement on Trade in Services (GATS) and for furthering its objectives.

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